A U.S. federal court has denied Kraken's motion to dismiss a lawsuit filed by the Securities and Exchange Commission (SEC), which alleges that Kraken is operating as an unregistered securities exchange. The SEC's lawsuit claims that some of the cryptocurrency transactions facilitated by Kraken qualify as investment contracts, and therefore, as securities subject to U.S. securities laws. The court's ruling emphasised that the SEC had plausibly argued that Kraken's activities might fall under securities regulations, reinforcing the idea that the Howey Test, a legal standard used to determine what constitutes a security, applies even in the context of cryptocurrency. Kraken's chief legal officer, Marco Santori, noted that while the court did not classify any specific tokens traded on Kraken as securities, the SEC will need to prove that each alleged transaction satisfies the Howey Test. This case highlights the ongoing legal challenges faced by crypto exchanges in the U.S. as the SEC seeks to assert its regulatory authority over digital assets.